Correlation Between On Holding and Puma SE
Can any of the company-specific risk be diversified away by investing in both On Holding and Puma SE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining On Holding and Puma SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between On Holding and Puma SE, you can compare the effects of market volatilities on On Holding and Puma SE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in On Holding with a short position of Puma SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of On Holding and Puma SE.
Diversification Opportunities for On Holding and Puma SE
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ONON and Puma is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding On Holding and Puma SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma SE and On Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on On Holding are associated (or correlated) with Puma SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma SE has no effect on the direction of On Holding i.e., On Holding and Puma SE go up and down completely randomly.
Pair Corralation between On Holding and Puma SE
Given the investment horizon of 90 days On Holding is expected to generate 0.93 times more return on investment than Puma SE. However, On Holding is 1.08 times less risky than Puma SE. It trades about 0.09 of its potential returns per unit of risk. Puma SE is currently generating about -0.01 per unit of risk. If you would invest 1,912 in On Holding on August 31, 2024 and sell it today you would earn a total of 3,921 from holding On Holding or generate 205.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.82% |
| Values | Daily Returns |
On Holding vs. Puma SE
Performance |
| Timeline |
| On Holding |
| Puma SE |
On Holding and Puma SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with On Holding and Puma SE
The main advantage of trading using opposite On Holding and Puma SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if On Holding position performs unexpectedly, Puma SE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Puma SE will offset losses from the drop in Puma SE's long position.| On Holding vs. Rocky Brands | On Holding vs. Steven Madden | On Holding vs. Caleres | On Holding vs. Weyco Group |
| Puma SE vs. Asics Corp ADR | Puma SE vs. Samsonite International SA | Puma SE vs. Adidas AG ADR | Puma SE vs. Wolverine World Wide |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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